Engineering services is a pretty generic term that basically covers everything involved in the design, analysis, quality assessment, and management of engineering projects. This includes design services for building and infrastructure projects, industrial processes and equipment, and environmental projects, construction and asset management of projects, and industrial process operations.
Vendors in the Global Engineering Services Market provide technical assistance for construction projects and carry out activities like project procurement and funding, feasibility studies, process management, procurement of contractors and suppliers, and quality assessment and accreditation.
Basically, if something needs building then engineering services will be involved. But as much as this market seems to cover any and every aspect of erecting a structure, the market itself is only growing at a CAGR of 3.57 percent from 2013-2018. However, even though market growth is pretty modest, it’s likely to maintain this growth due to the essential nature of the services.
Engineering Services Market Breakdown
The heavy infrastructure industry, industrial and resource asset management enterprises, and the non-residential construction industry are the major end-users in the market.
In 2013, the Global Engineering Services Market generated 24 percent of its revenue from industrial and resource asset management enterprises, which includes design services for industrial projects. The non-residential construction industry held a 21 percent share of the market, and the 2016 Olympic Games is expected to enhance the market potential of companies in this segment. Moreover, increase in the construction of commercial buildings such as shopping malls and warehouses is expected to enhance the market potential. The ‘others’ segment mostly refers to engineering services for public infrastructure and management projects.
Factors Driving Growth in the Engineering Services Market
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Increased Investment in Global Construction Industry
As one would hope, the construction industry is a major end-user of engineering services. The industry was valued at US$6.2 trillion in 2012 and it’s expected to grow steadily during the forecast period. Many countries are investing more and more in heavy infrastructure industries like mining, transportation, energy, and natural resources making it by far the largest segment of the Global Engineering Services Industry with a 41 percent share.
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Strong GDP Growth in Developing Countries
The GDP in many developing countries is growing at a faster rate than in developed countries, which means the investment opportunities in construction and non-construction projects in these areas are immense. It doesn’t take a rocket scientist to make the connection that this will ultimately boost the global market.
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Increase in Outsourcing of Manufacturing Processes
On a related note, many global firms are outsourcing their engineering processes to low-cost destinations. Countries in North America and Western Europe are outsourcing their product development processes and other engineering services to developing countries. In addition, the lack of a skilled workforce and engineers in developed countries drives the trend of outsourcing engineering services to developing countries.
